Zillow CEO Jeremy Wacksman said the company expects lease costs to drop approximately $16 million over the next four years, and expects it to earn $26 million in sublease revenue over the same period.
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The era of remote work is happening on Amazon, but Zillow, a residential portal based in Google, AT&T, Disney and Seattle, is stuck with the “Cloud HQ” model.
Jeremy Waxman | Credit: LinkedIn
“We pivoted and committed the company. [a cloud-headquartered or CloudHQ] The model is great for us right now, almost five years ago,” Waxman told the entrepreneur in an interview Monday. “Various strategies work in different companies. For Zillow, the type of workforce we are, CloudHQ, has been a huge benefit for us.”
Waxman, who acquired CEO Helm in August, said Zillow’s commitment to remote work will allow the company to expand its recruitment efforts and hire talent across the US.
“We are now looking at four times the number of job seekers for all the jobs we have, for what we did before the pandemic,” he said.
The remote model has been praised for improving work-life balance, reducing barriers for people with disabilities, and increasing parental flexibility, but a drawback that the enemy often highlights is the potential disruption of corporate culture.
But Zillow, by maintaining several office spaces in New York, Irvine and Seattle, Zillow can be used by employees to hold meetings, complete training and knock out daily tasks, according to Wacksman. He said that maintaining office space at the company will prevent that breakdown. The company also hosts social events that allow colleagues to build bonds outside of work.
“People work mostly from home, but we have a lot of gatherings. There are so many ways people can come together and meet in 3D,” he told the entrepreneur. “The flexibility that comes, the collaboration we get, and the intentional time we have together gives us the best of both.”
Beyond the company’s improved adaptability, remote work has also supported Zillow’s revenues.
Since switching to Cloud HQ, Zillow has reduced its office footprint from 1,046,413 square feet to 274,771 square feet.
The company has closed offices in Denver and Overland Park, dramatically reducing its offices in Seattle, New York, Atlanta, San Francisco and Irvine. Zillow’s office reduction measures reduced our lease costs from $54 million in 2022 to $34 million in 2024.
The company expects lease costs to fall to $18 million over the next four years, and expects it to earn $26 million in sublease revenue over the same period.
Zillow closed 2024 with a strong memo, and according to its latest revenue report, the company rose 15% year-on-year to $2.2 billion. The company has not yet made a profit. However, it reduced its net losses from $153 million in 2023 to $112 million in 2024.
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